A number of retail stores have reported earnings for the 2nd quarter of 2019, and they are good. This morning, Ed Yardeni explains what this means for the economy.

” Consumer spending, looked at from many different angles, still looks healthy. Consumers are spending at Walmart and at Target. They’re spending at restaurants and hotels. And they may have room to spend more, as the saving rate was relatively high at 8.1% during June and personal savings rose to a record $1.3 trillion over the past 12 months through June. Over that same period, real disposable income is up solidly, with a gain of 3.3%. Here’s a look at some more consumer-spending metrics and this week’s earnings reports from retailers confirming that consumer wallets are open—just not at department stores:

Online sales rose to a record $694 billion (saar) during June, well exceeding department stores sales ($138 billion) and sales at warehouse clubs and superstores ($496 billion). Online shopping now accounts for a record 35% of GAFO (general merchandise, apparel and accessories, furniture, and other sales), which includes retailers that specialize in department-store types of merchandise such as furniture & home furnishings, electronics & appliances, clothing & accessories, sporting goods, hobby, book, and music, general merchandise, office supply, stationery, and gift stores.

Bank of America often has a good, early read on consumer spending because it boasts 66 million consumer and small business clients. The bank’s CEO Brian Moynihan told CNBC yesterday that its consumer base spent $2 trillion ytd, a 5.9% increase y/y. “The U.S. consumer continues to spend and that will keep the U.S. economy in good shape,” he said.

(2) Plenty of dry powder. Consumers are benefiting from more jobs and higher wages. The unemployment rate was 3.7% in July, a tick above the 3.6% rate during April and May—which was the lowest rate since December 1969. Real average hourly earnings of production and nonsupervisory workers continued to climb in June, up 1.9% y/y, marking its 80th month of gains.

While consumers are spending some of their newfound dough, they’re saving lots too. The US personal saving rate is in an uptrend, as the absolute amount saved has climbed to new highs, as noted above. Typically, saving rates fall during economic booms as consumers get more optimistic and spend excessively. Saving rates often rise during recessions, when consumers turn more cautious. The saving-rate jump may mean consumers will be able to keep spending more, longer.”

The breach stands to be one of the worst for U.S. consumers because of the type of financial information that was accessed. This valuable consumer financial information can be used to figure out the identities of the most creditworthy or affluent consumers and open a card or loans in their names.

The article then goes on to list things that you can do if you think you have been affected.

The New York Times is reporting that China has been beefing up its trade negotiations team. This could indicate that they are more willing to work with the U.S. to come up with a compromise trade deal. From the linked article:

BEIJING — Two weeks before talks between the United States and China broke down, Beijing quietly called one of its most formidable trade negotiators out of a pre-retirement posting.

The negotiator, Yu Jianhua, a 28-year veteran of trade talks with American officials and at the World Trade Organization, returned to Beijing in mid-April from his position as China’s ambassador to the United Nations’ offices in Geneva. With his appointment, the Chinese government began to address an experience gap that could be holding it back as it tries to resolve a potentially devastating trade war with the Trump administration.

It is unclear how or whether a previous lack of trade-policy experience on China’s negotiating team contributed to the breakdown in negotiations last month. American officials walked away from the talks after their Chinese counterparts deleted page after page of provisions from a draft pact. The approval for such an assertive move almost certainly would have come directly from President Xi Jinping, the country’s top leader.

“Veterans will have expanded access to medical care outside Department of Veterans Affairs facilities beginning Thursday under a law signed by President Donald Trump last year and touted as a major achievement by Trump on the campaign trail.

Rules established under the law and published Wednesday in the Federal Register say the VA will pay for veterans to see non-VA doctors if they have to wait longer than 20 days or drive more than 30 minutes for primary or mental healthcare at a VA facility.

For specialty care, they can see private doctors at VA expense if they have to wait longer than 28 days or drive more than an hour to see a VA provider.

Previously, veterans who had to drive more than 40 miles or wait longer than 30 days could choose to see a private doctor paid for by the VA.

VA officials previously estimated the new rules could increase the number of veterans eligible for VA-sponsored private care to as many as 2.1 million – up from about 560,000.”

After a quiet day yesterday, the market is again falling on the possibility of a protracted trade war with China. From the linked CNBC article:

Stocks steadied Wednesday after two days of brutal selling that particularly slammed companies and sectors with exposure to China, like Caterpillar and the semiconductor industry. The market lost its gains late in the day, and the Dow closed barely higher while the S&P 500 was down 4, at 2,879.

Ed Keon, chief investment strategist at QMA, said the situation remains uncertain. “The odds of something going wrong are much higher today than they were last Friday, when there was pretty much consensus that deal was going to be done and we would have an announcement,” he said.

CNBC reported today that China’s Xi Jinping spent a good portion of his speech about global trade talking about reforming his country’s approach on this issue.

“Instead of focusing solely on his signature investment initiative, Chinese President Xi Jinping spent a good portion of a speech at the Friday opening ceremony of China’s Belt and Road forum discussing his plan for national economic reforms.

Much of that discussion focused on issues at the heart of the ongoing trade war between Washington and Beijing. Notably, Xi said his country will increase intellectual property protection and “stop arbitrary technology transfer,” two of the main sticking points of the trade dispute with the U.S., China’s largest trade partner.

“We will more effectively engage in international macroeconomic policy coordination,” Xi said, according to an official English translation of his Mandarin Chinese remarks. “A globalized economy calls for global governance. China will strengthen macro policy coordination with major economies to generate a positive spillover.”

“The Social Security program’s costs will exceed its income in 2020 for the first time since 1982—two years later than officials projected last year—forcing the program to dip into its nearly $3 trillion trust fund to cover benefits.

But by 2035, those reserves will be depleted and Social Security will no longer be able to pay its full scheduled benefits, according to the latest annual report by the trustees of Social Security and Medicare released Monday.

“Both Social Security and Medicare face long-term financing shortfalls under currently scheduled benefits and financing,” the trustees wrote, urging lawmakers to take action sooner rather than later to give policy makers enough time to phase in changes and shore up the programs.

Social Security consists of two programs, one for retirees and one for people who claim disability benefits. Taken separately, the retirement program will be able to pay full benefits on a timely basis until 2034, unchanged from last year’s report.”

In today’s “Wall Street Journal” there is a fascinating article on the importance of mice to the research of aging.

Grace and Blanche, two old mice who were second cousins, reached relative fame before dying within months of each other at their home in Bar Harbor, Maine.

Known fondly as the Golden Girls at Jackson Laboratory, a nonprofit that specializes in research and mouse production, the two were believed to be the oldest living mice in the world just before their passing in 2016. Gary Churchill, a geneticist who does aging research at the lab, was hoping one of them would reach her fifth birthday, a feat unknown to mice. Grace, the eldest, was 4 years and nine months old when she died, roughly the equivalent of 150 human years.

Aging mice are important to research on aging people, which is a growing field. Scientists put old mice, which are basically ones between the age of 18 and 24 months, in mazes to see how long it takes them to get out—a test of cognitive abilities. They put them on diets to see if cutting calories helps mice live longer (it does) and house them in groups to test theories about the impact of social networks on aging (it’s good). There’s a Core Facility for Aged Rodents at the University of Michigan’s Geriatrics Center.

]]>https://www.crossvault.com/recommended-reading/mice-and-aging/feed05077Learning a New Trick from my Old Dog: Friendship- from the WSJhttps://www.crossvault.com/recommended-reading/learning-a-new-trick-from-my-old-dog-friendship-from-the-wsj
https://www.crossvault.com/recommended-reading/learning-a-new-trick-from-my-old-dog-friendship-from-the-wsj#respondMon, 18 Mar 2019 14:02:11 +0000https://www.crossvault.com/?p=5071

I turned 70 in the same year that my dog, Lucy, turned 10—or, in dog years, 70. So we’re basically at the same stage of life, namely, Getting Old.

Lucy is handling it a lot better than I am.

I’m not complaining: I’ve had a good life, and I’m content. But Lucy is more than content: She’s happy, often exuberantly happy, constantly finding excitement and joy in everyday events. It occurred to me that maybe I could learn some life lessons from her—that I could find more happiness in my own life by doing the things Lucy does, except of course for drinking from the toilet.

One thing Lucy does is love people. She is extremely friendly. Even though, as a puppy, she was abandoned to the streets, where she probably had some unpleasant experiences, she shows no fear of strangers, human or canine. She is determined to shower love upon everybody she gets anywhere near. And she is always making new friends.